SFA Update – Five More Approvals

The PBGC Special Financial Assistance program for troubled multiemployer plans approved five more plans for bailouts.

The Retirement Plan of Local 1482 – Paint and Allied Products Manufacturers Retirement Fund (Local 1482 Plan). The plan, based in the New York Metropolitan area, covers 152 participants in the manufacturing industry. The Local 1482 Plan became insolvent in May 2019. At that time, PBGC started providing financial assistance to the plan. As required by law, the Local 1482 Plan reduced participants’ benefits to the PBGC guarantee levels, which were roughly 35 percent below the benefits payable under the terms of the plan. PBGC’s approval of the SFA application enables the plan to restore all benefit reductions caused by the plan’s insolvency and to make payments to retirees to cover prior benefit reductions. SFA will enable the plan to pay retirement benefits without reduction for many years into the future. The plan will receive $11.4 million in SFA, including interest to the expected date of payment to the plan. “Special Financial Assistance, funded by the American Rescue Plan, ensures the retirement these 152 manufacturing workers were promised is delivered,” said U.S. Secretary of Labor Marty Walsh, chair of the Pension Benefit Guaranty Corporation’s Board of Directors. “Without this funding these workers would have continued to face diminished pension payments that threaten the secure retirement that they worked many years to earn.” In addition to the $11.4 million of SFA paid to the plan, PBGC’s Multiemployer Insurance Program will be repaid $1.5 million, which is the amount of the plan’s outstanding loans, including interest, for the financial assistance PBGC provided beginning in May 2019 and ending on the expected date of payment of SFA to the plan.

The Trucking Employees of North Jersey Welfare Fund, Inc. Pension Plan (Trucking Employees Plan). The plan, based in Union City, New Jersey, covers 6,121 participants in the transportation industry. The Trucking Employees Plan became insolvent in July 2021. At that time, PBGC started providing financial assistance to the plan. As required by law, the Trucking Employees Plan reduced participants’ benefits to the PBGC guarantee levels, which were roughly 50 percent below the benefits payable under the terms of the plan. PBGC’s approval of the SFA application enables the plan to restore all benefit reductions caused by the plan’s insolvency and to make payments to retirees to cover prior benefit reductions. SFA will enable the plan to pay retirement benefits without reduction for many years into the future. The plan will receive $673.1 million in SFA, including interest to the expected date of payment to the plan. “President Biden’s American Rescue Plan will deliver Special Financial Assistance to the Trucking Employees of North Jersey Welfare Fund, Inc. Pension Plan that ensures the 6,121 New Jersey transportation workers and retirees covered by this plan will receive the retirement benefits they have earned,” said U.S. Secretary of Labor Marty Walsh, chair of the Pension Benefit Guaranty Corporation Board of Directors. “This assistance will deliver the secure retirement these workers were promised in return for many years of hard work.” In addition to the $673.1 million of SFA paid to the plan, PBGC’s Multiemployer Insurance Program will be repaid $16.7 million, which is the amount of the plan’s outstanding loans, including interest, for the financial assistance PBGC provided beginning in July 2021 and ending on the expected date of payment of SFA to the plan.

The Food Employers Labor Relations Association and United Food and Commercial Workers Pension Plan (FELRA Pension Plan). The FELRA Pension Plan, based in Landover, Maryland, covers 51,500 participants in the service industry. The plan will receive approximately $1.24 billion in special financial assistance, including interest to the expected date of payment to the plan. The plan was projected to run out of money in 2022. Without the SFA Program, the FELRA Pension Plan would have been required to reduce participants’ benefits to the PBGC guarantee levels upon plan insolvency, which is roughly 20 percent below the benefits payable under the terms of the plan. SFA will enable the plan to continue to pay retirement benefits without reduction for many years into the future. “President Biden’s American Rescue Plan will deliver Special Financial Assistance to the Food Employers Labor Relations Association and United Food and Commercial Workers Pension Plan that ensures the more these 51,500 service industry workers and retirees covered by this plan will receive the retirement benefits they have earned,” said U.S. Secretary of Labor Marty Walsh, chair of the Pension Benefit Guaranty Corporation Board of Directors. “This assistance will deliver the secure retirement these workers were promised in return for many years of hard work.”

The Cement Masons Local Union 681 Pension Plan (Local 681 Plan). The plan, based in Houston, Texas, covers 195 participants in the construction industry. The Local 681 Plan became insolvent in August 2016. At that time, PBGC started providing financial assistance to the plan. As required by law, the Local 681 Plan reduced participants’ benefits to the PBGC guarantee levels, which were roughly 15 percent below the benefits payable under the terms of the plan. PBGC’s approval of the SFA application enables the plan to restore all benefit reductions caused by the plan’s insolvency and to make payments to retirees to cover prior benefit reductions. SFA will enable the plan to pay retirement benefits without reduction for many years into the future. The plan will receive $10.8 million in SFA, including interest to the expected date of payment to the plan.  “The Special Financial Assistance approved today means that these 195 construction workers and retirees will receive the full retirement benefits they earned,” said U.S. Secretary of Labor Marty Walsh, chair of the Pension Benefit Guaranty Corporation’s Board of Directors. “Since 2017, they have been receiving reduced pension payments through no fault of their own. Today’s action, made possible by President Biden’s American Rescue Plan, restores those benefits and delivers the secure retirement they were promised.” In addition to the $10.8 million of SFA paid to the plan, PBGC’s Multiemployer Insurance Program will be repaid $5.4 million which is the amount of the plan’s outstanding loans, including interest, for the financial assistance PBGC provided beginning in August 2016 and ending on the expected date of payment of SFA to the plan.

The Cement Masons Local 783 Pension Plan (Local 783 Plan). The plan, based in Houston, Texas, covers 51 participants in the construction industry. The Local 783 Plan became insolvent in November 2016. At that time, PBGC started providing financial assistance to the plan. As required by law, the Local 783 Plan reduced participants’ benefits to the PBGC guarantee levels, which were roughly 20 percent below the benefits payable under the terms of the plan. PBGC’s approval of the SFA application enables the plan to restore all benefit reductions caused by the plan’s insolvency and to make payments to retirees to cover prior benefit reductions. SFA will enable the plan to pay retirement benefits without reduction for many years into the future. The plan will receive $3.8 million in SFA, including interest to the expected date of payment to the plan. “These workers went to work with the promise of a pension when they retired. Today, the Biden-Harris Administration has fulfilled that promise,” said U.S. Secretary of Labor Marty Walsh, chair of the Pension Benefit Guaranty Corporation Board of Directors. “Under President Biden’s American Rescue Plan, the Cement Masons Local 783 Pension Plan received Special Financial Assistance to deliver the pensions that these workers have earned.” In addition to the $3.8 million of SFA paid to the plan, PBGC’s Multiemployer Insurance Program will be repaid $0.7 million, which is the amount of the plan’s outstanding loans, including interest, for the financial assistance PBGC provided beginning in November 2016 and ending on the expected date of payment of SFA to the plan.

Our updated summary of the 34 plans in the system – 20 approvals and 14 under review:

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